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IDFA Applauds USDA's Rejection of Payment Scheme in Northeast
On January 31, the U.S. Department of Agriculture (USDA) published a final decision that alters certain provisions of the Northeast Federal Milk Market Order, but does not institute market-wide service payments. IDFA hailed USDA's action, since IDFA had opposed the proposed payment scheme and testified against it at a September 2002 hearing.
Last week's announcement is a finalization of USDA's recommended decision, published in March 2004, which also rejected market-wide service payments in the Northeast order. Affected dairy producers will now vote on the USDA's final decision. If approved at the farmer referendum, USDA will schedule an implementation date.
The USDA final rule changes for the Northeast order include:
- Various changes in reporting and payment dates;
- Establishment of year-round supply plant performance standards;
- Elimination of the split-plant provision in the Northeast order;
- Creation of a standard for the number of days of production a dairy farmer must deliver milk to a pool plant to qualify the rest of the dairy farmer's milk for diversion;
- Establishment of explicit limits on the amount of milk a pool plant may divert to nonpool plants;
- Exclusion of milk received by supply plants from producers not eligible to be pooled on the Northeast order from the total volume of milk used to satisfy plant performance standards;
- Prohibition of the ability to pool the same milk on the Northeast order and on a market-wide pool administered by state regulation; and
- Authority granted to the Northeast Market Administrator to adjust both touch-base and diversion limit standards as market conditions warrant.
As reported previously in News Update, the market-wide service payment scheme was the only proposal challenged by IDFA at the four-day hearing, held September 10-13, 2002. To review USDA's final rule, click here to visit the department's website.
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Posted February 7, 2005
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